Tata Steel Ltd. share price target

9 Other subsidiaries' profitability improved in Q4. Tata Metaliks, Tata Tinplate, Tata Processing&DistributionandTataNYKweremajorsubsidiaries;,whichperformedwell andtheentireimprovementissustainablewithoutoneoffs....

ICICI Securities Ltd | Retail Equity Research For Q4FY16, Tata Steel reported a good set of operational numbers. While the topline came in lower than our estimates, EBITDA...

ICICI Securities Ltd | Retail Equity Research Tata Steel UK has signed an agreement to sell its long products Europe (LPE) business to Greybull Capital. The sale for a nominal consideration...

business in Europe (LPE). This starts a new journey for Tata Steel which will see the company offload various assets which substantially dragged its profitability. While LPE was the biggest drag on profitability, the company is also looking to sell its balance...

Board decides against further investment in UK Tata Steel (TATA) has announced that its Board has decided against further investment in Tata Steel UK (TSUK), given its high cost operations and...

Raw Material purchases impact EBITDA: Tata Steels standalone revenues for 2QFY2016 declined 12% yoy to Rs9,531cr (7% ahead of our estimate of Rs8,879cr), led by better than expected volumes and pricing. However, increased raw material expenses on account of external purchases of iron ore resulted in the EBITDA declining sharply by 40% yoy to Rs1,862cr, 3% below our expectation of Rs1,918cr. The adjusted net profit nearly doubled to Rs3,844cr led by a sharp jump in other income on account of gains from sale of quoted investments of Rs3,505cr, while interest expenses were lower on account of debt repayments in 1QFY2015. Overseas operations remain under pressure: The EBITDA of the European operations turned negative, led by a steep decline in realisations and on account of lower volumes. Tata Steel Europe (TSE)s sales volumes declined 3% yoy to 3.27MT, 7% below our expectation of 3.53MT. Realisation declined 20% yoy to $798/tonne, but 10% ahead of our estimate of $723/tonne. SEA volumes continued to remain under pressure, with deliveries declining 27% yoy to 0.69MT. Outlook and valuation: Given the weak outlook on steel prices and with the European business already in the red at the operating level, we expect tough times to continue...

8 European business reported operating loss of US$36.7mn due to lower volumes and restructuring cost in its UK business. We expect strong GBP (versus Euro), pricing pressureandrestructuringcoststocontinueinthenearfuture....

weak European performance. However,India business margins could see further contraction as (1) steel prices continue to weaken, and (2) iron ore costs are expected to escalate with Noamundiironoreminescurrentlyshutthisisleadingtohigherdependenceonexternaliron...